S&P 500 Holds Support as Semiconductor Weakness Deepens

Here’s how I’m reading the market right now. The major indices are still holding key support, but the strength underneath them is weakening. The SPDR S&P 500 ETF Trust (SPY), which tracks the S&P 500 Index (SPX), finished down about 0.54%. SPY traded as high as $754.57 and fell to $747.88, right back into the declining trend line.

The July 10 breakout is still intact, but the price has tested that trend line during three of the last four sessions. The next support is $744.97, and $747.49 is the immediate level to watch. A close below it would weaken the breakout. The large lower wicks still show buyers stepping in, but they are defending the same area repeatedly.

The Invesco QQQ Trust (QQQ), which tracks the Nasdaq 100 Index (NDX), dropped 1.64%. Support at $705.39 held on the close, but repeated testing has made it fragile. If it breaks, the next support is $695.25.

The bigger warning is the VanEck Semiconductor ETF (SMH). It moved below the neckline of a head and shoulders pattern. Confirmation requires a close below $564.45. If that happens, the measured target is $460.25, another 19% lower. SMH is already down 15% from its high, so the total decline could exceed 30%. A move back above the neckline would invalidate that target.

The United States 10 Year Treasury yield (US10Y) is still above 4.55%. A break below 4.55% could help stocks. A move higher would add pressure, with the next resistance at 4.687%.

In commodities, Gold Futures (GC) are struggling around $4,098. If gold cannot reclaim that level, the next support is $3,886, followed by the larger support area below $3,500. Silver Futures (SI) are testing $55.62. A close below that increases the chance of a move toward $49.85.

West Texas Intermediate Crude Oil Futures (CL) fell about 1.43% but continue consolidating under resistance. Another two or three sessions could build enough momentum for a move toward $85.75.

Henry Hub Natural Gas Futures (NG) traded between $2.79 and $2.93. Support is $2.75, while daily closes above $2.90 would improve the setup. The larger breakout level is $3.30, the neckline of a possible inverse head and shoulders pattern. A clean break there could open the door to $4. Artificial intelligence data center demand and the Northern Hemisphere winter, roughly three to five months away, could both support that move.

In technology, Taiwan Semiconductor Manufacturing Company Limited (TSM) beat earnings per share expectations by 10.78% but missed revenue by 1.2%. The bigger issue was margin pressure. Taiwan Semiconductor now has resistance at $434.80, with support between $390 and $393, followed by $374.72.

Vertiv Holdings Co (VRT) fell 13.64% and is now down more than 40% since June 25. Its relative strength index is 36.61, still above 30. Support runs from $203.85 to $193.22. A bounce would face resistance at $231.30, then $239.18. SanDisk Corporation (SNDK) was also caught in the selling pressure.

Western Digital Corporation (WDC) confirmed a head and shoulders breakdown after the long upper wick on June 18. The stock is down about 43% from its high. A rebound could retest $527, but the measured target is $212.58. Previous pivots from February and March 2026 could provide support between $315 and $300 first.

Best Buy Co., Inc. (BBY) is one of the stronger charts. It has broken above a declining trend line that began in November 2021 and connected with the September 2024 high. After two weeks of breakout action, a close above the October 27 pivot could support a move toward $93.13. A pullback toward $77.87 would be the next potential buying area.

Take Two Interactive Software, Inc. (TTWO) remains in focus ahead of the November release of Grand Theft Auto VI, but the question is whether that excitement is already priced in.

Bitcoin (BTC) is holding near the lower boundary of its parallel channel. If the developing inverse head and shoulders pattern confirms, the next upside range is $71,000 to $72,000.

The market has not broken down, but the warning signs are building. SPY and QQQ are holding support, while SMH, memory stocks, and artificial intelligence-related names are breaking important levels. That divergence is what matters most right now.